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  • Furnishing An Elastic Currency

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    yuvrajwilson
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    This article discusses how the Federal Reserve System was established in 1913 to address liquidity issues in the U.S. banking system and provide an "elastic currency" that could expand and contract with economic conditions. The article analyzes banking data from before and after the Fed's founding to show how it helped stabilize short-term interest rates and provided banks more reliable access to liquidity. The Fed helped reduce the frequency and severity of banking panics by giving banks the ability to borrow reserves from the central bank during times of tight credit.

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    Furnishing an Elastic Currency

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    This article discusses how the Federal Reserve System was established in 1913 to address liquidity issues in the U.S. banking system and provide an "elastic currency" that could expand and contract with economic conditions. The article analyzes banking data from before and after the Fed's founding to show how it helped stabilize short-term interest rates and provided banks more reliable access to liquidity. The Fed helped reduce the frequency and severity of banking panics by giving banks the ability to borrow reserves from the central bank during times of tight credit.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    12 views1 page

    Furnishing An Elastic Currency

    Uploaded by

    yuvrajwilson
    This article discusses how the Federal Reserve System was established in 1913 to address liquidity issues in the U.S. banking system and provide an "elastic currency" that could expand and contract with economic conditions. The article analyzes banking data from before and after the Fed's founding to show how it helped stabilize short-term interest rates and provided banks more reliable access to liquidity. The Fed helped reduce the frequency and severity of banking panics by giving banks the ability to borrow reserves from the central bank during times of tight credit.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
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    https://files.stlouisfed.

    org/files/htdocs/publications/review/2018/01/10/
    furnishing-an-elastic-currency-the-founding-of-the-fed-and-the-liquidity-of-the-u-
    s-banking-system.pdf

    Mark A. Carlson and David C. Wheelock, "Furnishing an “Elastic Currency”: The


    Founding of the Fed and the Liquidity of the U.S. Banking System," Federal
    Reserve Bank of St. Louis Review, First Quarter 2018, pp. 17-44.
    https://doi.org/10.20955/r.2018.17-44.

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